Retail media doesn't have a measurement problem anymore, making the moment dangerous for brands.
A few years ago, the critique of retail media networks was easy to make and
simple to dismiss: they only rewarded the last click, they couldn’t see the funnel, and they were a tax on the demand you created.
That critique is obsolete. Big players like Amazon
and Walmart have made enormous headway on measurement sophistication, inventory diversification, and innovating the media approach beyond just the search engine results page.
Amazon’s Marketing Cloud (AMC) is a genuine clean-room capability, and Amazon, Walmart and others are pushing advertisers up-funnel into their own CTV, DSP, and streaming inventory.
It is becoming table stakes that they can tell a brand with precision how that spend contributed to a sale. The big retail media players have long surpassed the criticism that they only understand
the bottom of the funnel.
AMC and its equivalents are excellent at proving Amazon's own upper-funnel inventory works. Prime Video ads, Amazon DSP, and sponsored brand video can now
be tied back to conversion with rigor. That's a legitimate advantage and brands should use it.
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Here's the part that doesn't get said enough: even where a brand
believesin funding the upper funnel, it often can't get there because the ad budget has already been allocated.
The reality is that branded and category search volume on
retail platforms is now a standing cost of doing business.
Brands have to bid to defend their own name, hold shelf position against competitors, and increasingly compete with the retailer's own
private label every single day, at volume. That spend should no longer be viewed as discretionary. It functions as a fixed cost that annually increases with new competitors entering the category and
cost-per-click continue to rise each year.
Every marginal dollar an advertiser might otherwise put toward brand-building gets absorbed first by defensive search. And because
brands in the same category are caught in a defensive posture, differentiation collapses to price and promotion within the search results.
When competitors are bidding on the identical keyword or
shelf, price and promotion become the only levers anyone has left to pull. That's the moment the brand gets subtracted from the cart.
Defensive search can always justify itself: a bid, a
click, and most importantly a quick sale. Upper-funnel and off-platform brand investment produces a slower, cross-channel, harder-to-isolate effect, which is harder to defend on a media plan because
it takes time to see and measure the true impact of the media.
The cruelty of the cycle is that commoditization makes brand distinctiveness matter more. It's the only way out and
at exactly the moment budget mechanics make it hardest to fund.
Distinctiveness is still possible, but it has to be an active choice by a brand, not a byproduct.
This isn't a hopeless picture. Some brands have refused to let the shelf flatten them, and they're worth studying precisely because they operate in categories built for commoditization.
Take a category as unglamorous as batteries. Energizer has spent decades building a single, simple association: reliability, endurance, and an energetic bunny. That equity shows
up on the retail shelf as a premium that a shopper will pay without requiring a promotion to justify it.
Or, look at bottled water, arguably the most commoditized category that exists. Liquid
Death took a product with almost no functional differentiation and built a brand loud enough that people wear it as merchandise, which means the sale is often won before the shopper ever opens the
search bar.
What these two brands have in common isn't necessarily bigger retail media budgets. It's that their brand equity was top of mind
before the shopper searched. So
when that consumer hits the results page, they are both
physically and mentally present to the consumer. That's the entire argument for upper-funnel investment, without sacrificing the
lower-funnel activity.
We know that brands have not lost faith in brand-building or the need for mental availability.
CMOs already believe in it and nobody needs convincing
that a category of interchangeable, discounted SKUs is a difficult place to compete.
The blocker is that marketers struggle to get incremental budget approved for something that they
don’t have immediate results to prove will move the needle. Even in a world where everyone believes in brand-building, it requires an initial leap of faith commitment to spend budget that
won’t have an immediate, measurable ROI impact.
Two critical shifts can tangibly help brands make this leap:
Separate defensive spend from growth spend, and stop making them compete for the same budget pot. Defensive and category search should be budgeted like the cost of doing business
it actually is. Brand and upper-funnel investment should be a separate line, justified against its own incrementality evidence, not forced to win a ROAS argument it was never built to win against
last-click search.
Treat platform clean rooms as one input, not the whole picture. AMC-style attribution is valuable and should be used, but
layered underneath there has to be triangulated incrementality testing based on geo-lift studies and marketing mix modeling that can see media the retailer can't. The goal isn't to replace retail
media measurement; it's to stop letting it be the only measurement used.
Retail media won't hand brands that mechanism. Build the brand, and let the shelf catch up, otherwise
the cycle will continue to only bid for the same keyword, on the same shelf, indefinitely.